Shirley Williams, one of the SDP's ‘gang of four', wins Crosby byelection on 26 November 1981. Photograph: Don Mcphee for the Guardian

Vincent Hanna, thou shouldst be living at this hour. Parliamentary byelections, which Hanna transformed into memorable TV fiestas in the Thatcher era, have become tepid and tedious since the bonhomous Belfast bruiser quit the BBC in 1987. You have to be at least 40 to remember how Hanna, who died in 1997, singlehandedly conjured byelections into democratic theatre. His ego made electoral politics live in a way it has rarely done since, which is partly why the control freaks then took over.

The Eastleigh byelection, which takes place a week today, would be tailormade for Hanna. It is a contest with everything. It was triggered by a scandal – the resignation of Liberal Democrat ex-minister Chris Huhne after his perverting the course of justice guilty plea. It has flawed flesh-and-blood characters for candidates. It is being fought between parties angrily consumed with high-stakes rivalry, and is taking place at a turbulent time. Above all, the result will have real repercussions. Even without Hanna, it is clear that Eastleigh is a momentous byelection, a throwback battle to rank with Crosby and Greenwich long ago.

Let's remind ourselves of the electoral facts. Back in 2010, Huhne had a majority in Eastleigh of 3,864. He took 47% of the votes, against 39% for the Tories' Maria Hutchings, who is standing again, and 10% for Labour, whose vote has been squeezed by the Lib Dems over the years. Ukip was a distant fourth, with 4%. Barring an unlikely surge for Labour, Ukip or one of the many fringe candidates, Eastleigh looks like a classic two-horse race.

When campaigning began, only a fortnight ago, the two coalition parties seemed to be starting neck and neck. Amid squabbles over boundary changes, mansion tax, Europe and the NHS, each of them was up for the fight. One opinion poll put the Tories just in front. A second had the Liberal Democrats in a narrow lead. With a week to go, however, a consensus has emerged that Mike Thornton is on course to retain the seat for the Lib Dems. The Lib Dems themselves quietly think this. The Tories, already managing expectations down, seem to agree. The bookies appear certain too. Any other result would now be seen as a significant upset.

Let's be absolutely clear, as ever, that the consensus may be wrong. In the national opinion polls that have reported this week, the Lib Dems are on 12% or less, which means they are at least 12 points down on the 24% they scored across Britain in 2010. In the same national polls, Labour is at least eight points up on 2010 and the Tories at least five points down. And one national poll has Ukip on 14%. If opinion shifts on that scale were reflected at Eastleigh, and especially if there were any sort of a late surge towards one of the challengers, most bets would be off. And a lot can happen in a week.

If the consensus is right, however, a Lib Dem win in Eastleigh will be a pivotal political event, and by far the most important byelection result of this parliament. Its effects will be felt in several different ways through to the next general election and beyond.

Most importantly, it will have proved that the Lib Dems can still win elections on their own territory. This has always been an article of faith among Lib Dem activists, even amid all the terrible opinion polls. Yet the claim has taken such a battering in every local and parliamentary election for more than two years that it was beginning to look like a drowning party clutching at a straw. A piece of real live bankable proof – especially in a contest triggered by a Lib Dem high-flier's disgrace – will vindicate the sagging narrative and be a priceless morale booster for Nick Clegg's party.

But the implications go much further. Most Lib Dem MPs sit for seats in which the main challenger is a Tory. Most Lib Dem target seats – even though that is a bit of an optimistic category these days – are Tory-held too. If Eastleigh is a guide, it means the Lib Dems can defend their bastions against the Tories. That could mean that all that talk about inevitable Lib Dem wipeouts in 2015 may be wide of the mark.

If the Lib Dems can retain 40 or even 50 of the 57 seats they won in 2010, the parliamentary arithmetic next time around will look very different, and the chance of a Tory overall Commons majority will significantly diminished. Look at 1997, say party leaders. We started that campaign on 10% in the polls and ended on 17% with 46 seats. It could happen again.

A win in Eastleigh would also be good news for Clegg personally. Defeat in Eastleigh, plus another bad Lib Dem showing in the May local elections, would irresistibly trigger leadership challenge talk this autumn. Pressure would mount for someone like the business secretary, Vince Cable, to take over before the general election, or for an early Lib Dem exit from the coalition. Those things may still happen. But a win next week would diminish their likelihood. Ironically, while it would strengthen the possibility of another hung parliament, and perhaps of a Lib Dem coalition with Labour after 2015, holding Eastleigh would also boost a Lib Dem leader with whom Labour would prefer not to deal.

And then there is the impact on the Conservatives. As government parties often do, they have lost votes and share in every other byelection in this parliament. Yet the Tories, especially in their current mood, would take their failure to win Eastleigh very badly indeed. The same implications than would so hearten the Lib Dems about the result would dismay the Tories. The overall majority so many Tories believe they could have won in 2010 and which they desperately crave in 2015 would look even less attainable. The party would become more difficult to manage at Westminster. Many Tories, illogically in most respects, would blame David Cameron for their woes. The Boris Johnson bandwagon would get another push. Immigration would begin to dominate the Conservative campaign.

Whatever happens next week, Eastleigh will be one of the most consequential byelections in memory. Even a close race, irrespective of the outcome, suggests that a second hung parliament is seriously on the cards after 2015, perhaps in a new configuration, perhaps in one that is surprisingly close to the one we have now. The voters will decide that soon enough. But the next seven days could shape British politics for a long time to come.